Enron was, in layman's terms, a nest of dirtballs (By Dave Barry)

[Guest guest]

Hare Krishna.

 

 

If you're an average layperson, your grasp of high finance consists of

knowing your ATM code. So you're probably bewildered by this scandal

surrounding the collapse of Enron, which had been the seventh-largest

corporation in America. (The sixth largest is the guys who go

``WHASSSSSSUP!'')

So today we're going to explain the Enron story in the Q&A format, using

simple financial terms that you can understand, such as ``dirtballs.''

 

Q. How, exactly, did Enron make money?

 

A. Nobody knows. This is usually the case with corporations whose names

sound like fictional planets from Star Wars. Allegedly, Enron was in the

energy business, but when outside investigators finally looked into it, they

discovered that the only actual energy source in the entire Enron empire was

a partially used can of Sterno in the basement of corporate headquarters.

Using a financial technique called ``leveraging,'' Enron executives were

able to turn this asset into a gigantic enterprise whose stock was valued at

billions of dollars.

 

Q. What does ``leveraging'' mean?

 

A. Lying.

 

Q. Why didn't Wall Street realize that Enron was a fraud?

 

A. Because Wall Street relies on ``stock analysts.'' These are people who do

research on companies and then, no matter what they find, even if the

company has burned to the ground, enthusiastically recommend that investors

buy the stock. They are just a bunch of cockeyed optimists, those stock

analysts. When the Titanic was in its death throes, with the propellers

sticking straight up into the air, there was a stock analyst clinging to a

railing, asking people around him where he could buy a ticket for the return

trip.

 

Q. So the analysts gave Enron a favorable rating?

 

A. Oh, yes. Enron stock was rated as ``Can't Miss'' until it became clear

that the company was in desperate trouble, at which point analysts lowered

the rating to ``Sure Thing.'' Only when Enron went completely under did a

few bold analysts demote its stock to the lowest possible Wall Street

analyst rating, ``Hot Buy.''

 

Q. What other stocks are these analysts currently recommending?

 

A. Mutual of Taliban.

 

Q. Doesn't Enron have a board of directors whose members are responsible for

overseeing the corporation?

 

A. Yes. They are paid $300,000 a year.

 

Q. So how could they have allowed this flagrant deception to go on?

 

A. They are paid $300,000 a year.

 

Q. But didn't Enron have outside auditors? Why didn't they discover and

report these problems?

 

A. Yes, Enron had one of the most venerable auditing firms in the nation.

 

Q. What do you mean by ``venerable?''

 

A. We mean ``stupid.'' As a result, Enron executives were able to deceive

the auditors via slick and sophisticated accounting tricks.

 

AUDITOR: OK, so you're saying you made $600 million in profit.

 

EXECUTIVE: Correct.

 

AUDITOR: Can I see it?

 

EXECUTIVE: Sure! It's right here in my desk! UH-oh! The drawer is stuck!

 

AUDITOR: Wow! Just like last year!

 

Q. What should be done to punish the Enron executive dirtballs who, knowing

the company was in trouble, cashed in their own stock, and screwed thousands

of small investors?

 

A. In the interest of putting this ordeal behind us, we believe they should

receive only a slap on the wrist.

 

Q. Really?

 

A. With a hatchet.

 

Q. Isn't that a pretty severe punishment?

 

A. Actually, it has been deemed harmless.

 

Q. By whom?

 

A. Wall Street analysts.

 

Hare Krishna --

 

your servant, Balarama Dasa